SHARMA, Prof. Arun Kumar, National Chairman, Australia India Business Council

SHARMA, Mr Mohit, National Treasurer, Australia India Business Council

Committee met at 11: 03

CHAIR ( Ms Vamvakinou ): Welcome. I declare open this public hearing of the Joint Standing Committee on Migration of the Commonwealth Parliament for its inquiry into multiculturalism and the contribution of migration to Australian society. In November 2011 the committee heard from the Department of Foreign Affairs and Trade and from Austrade on the contribution of diaspora communities to Australia's international relations generally and to international trade and investment. Today we will continue that theme and take evidence from the Australia India Business Council. The hearing is being broadcast live and is being recorded by Hansard. The transcript of what is said today will be posted on the committee's website and the hearing is open to the public. I now call representatives from the Australia India Business Council.

Prof. Sharma : My name is Arun Kumar Sharma. I am the National Chairman of the Australia India Business Council.

Mr Sharma : My name is Mohit Sharma. I am the National Treasurer for the Australia India Business Council.

CHAIR: Although the committee does not require you to speak under oath, you should understand that these hearings are formal proceedings of the Commonwealth Parliament. Giving false or misleading evidence is a serious matter, and may be regarded as contempt of parliament. I ask you now to make a short introductory statement. The committee will then proceed to questions. Thank you.

Prof. Sharma : Thank you for the opportunity. The Australian India Business Council will provide some contextual statements on a few of the issues that we have presented to you and on some of the issues that we think are going to be important in the long term with respect to migration and the business links between Australia and India. The Australia India Business Council is a body that facilitates trade and business links within Australia and India. It has undergone a governance reform. It used to be an association and it has now become a company limited by guarantee, with a new constitution. It was incorporated fairly recently. We are reacting to the growing business between India and Australia by becoming more formal under ASIC regulations.

The body has been going for 25 years now. We celebrated our 25th year last year. It is promoting business links between Australia and India. We represent Australian companies doing business in India, Indian companies doing business in India, and individuals who have an interest in business links. We provide input to both the Australian government and the Indian government on the challenges faced. We will be talking about many of the issues the Indian companies face here, but we take equally seriously the concerns of Australian companies working in India with the Indian government and the kinds of challenges they face. So we work in both ways; that is our role.

The business links between Australia and India are growing at a very rapid pace. The growth is largely one-sided because of the energy and resources needs of India. So there is an order of magnitude difference between what we export to India and what we import from India. Much of the growth in recent years will continue to be driven by investment in the resources sector, largely in Queensland but also in the rest of the country. The reason why it is happening in Queensland is that India does not have metallurgical coal, which it needs for the steel industry, and it also does not have very good quality thermal coal. Although it can get thermal coal from South Africa and Indonesia, it sees Australia as a long-term, sovereign risk-free source of thermal coal for its power needs. So we are seeing significant investment by companies like Adani and GVK in the Galilee Basin.

Once these business links come here, they look at diversifying. They want to go into LNG and into other sectors, like primary industry. As you can understand, India's growth is increasing. As income levels are rising, protein consumption is growing. The natural protein consumption in India is not about meat—it is about chickpeas and lentils. Australia is one of the largest exporters of chickpeas to India. They are some of the shifts we are likely to see.

So we are going to see a lot of Indian investment and companies coming in. They will be bringing in a lot of executive talent. If you look at the investment in the Galilee Basin, added to the investment in the Gladstone area in LNG and what is happening in Western Australia, we are looking at a requirement of tens of thousands of people to address the skills shortage. The challenge that this is going to cause, with such a large influx of people from overseas, worries us.

My daytime role is Deputy Vice Chancellor of Research and Commercialisation at the Queensland University of Technology. During the time of the attacks on Indian students in Victoria I accompanied the federal government to India. I think we learned a lot from it. There were real, serious issues here, but the way the Indian media portrayed them was a challenge. I think we learned a lot about how to handle these issues.

The reason why I am concerned about it is that, as this influx happens—and it is not going to come only from India; it is going to come from many countries—these people are not going to be working in Melbourne or Sydney, which can absorb such large influxes. They are going to be working in small mining towns, where that influx could cause a lot of social issues. We have to be aware of how we address those issues and how we educate the community about the likely influx.

So the Australia India Business Council advice to Indian companies that are investing here is that they have to become part of the community. We advise them that they have to support the community. They have to do everything to educate and train people who are here, but obviously they may not be able to address all the needs so they will have to bring people there. So we are doing our bit to help make them part of the community for the longer term investment. We would like to see bipartisan support for a staged influx of workers so it does not become a political issue. That will be a big challenge for us going forward; for Australia's productivity and economic competitiveness, and also for attracting investment. That is one issue.

There is a second issue that we feel is a bit of a challenge. I will put it in a cultural/social context. Because of the student issue, there are tens of thousands of students from India who are currently in limbo here, who are driving taxis, and who have been in Australia now for several years. They understand the Australian way of life, but they do not know what is happening to them; they are in limbo. I think there is a good opportunity for us to come up with clever ways of retraining them, by getting partnerships with the state governments and various companies, so that if the demand in the mining sector picks up we can link them somehow with the enterprise migration agreement and they can become more productive members of the community. They might be able to migrate. These people are already living here. They understand the Australian way of life. This is rather than importing people right away who go to communities without understanding the Australian way of life.

But there is another dimension to it. I went as a student to the United States in 1985. The only way to communicate back home was via a $2-a-minute phone call, which happened once every month or two months. The main way to communicate was via aerograms. Today these students here are in constant touch. It is not a weekly summary, or a daily summary in the evening, of what happened—with social media they are constantly connected. They wake up in the morning and then they communicate with their family and friends in India. They have breakfast and then they communicate. So during the student crisis, although the police here did not know anything about it, their friends and family knew everything and the Indian media picked it up. Another dimension that has arisen is that India has a highly dynamic and competitive media. Social issues that emerge from here are being watched there, and they can be taken out of proportion. We have to be aware of it. The student crisis has helped us understand these issues, but I think we have to be aware of it. The context that I am putting it in is that the great thing for Australia is that China and India are growing. We have a great opportunity to take part in this growth, but I think we have to be aware that if the social and cultural dimensions are managed well, it will be much better for the links between the two countries. These are some of the contextual issues I thought I would bring to you. I am happy to answer any questions. By the way, Mr Mohit and I are not related, if that is what you were thinking.

CHAIR: No. There are a lot of Smiths and Joneses around and Papadopouloses who are not related. Thank you very much. Yours is an interesting submission. I want to ask you some questions. They are not intended to be negative, but to reflect some of the attitudes of the broader community here. I would like to know whether you have given them any thought. I have been informed by my own community in Melbourne about the actions of the Indian media and the way it fed those very unpleasant scenes here in Melbourne. So to me, anyway, you are reaffirming that—an interesting thing in itself. One of the issues with a lot of the Indian students here in Australia is that they are stuck, for whatever reason, because of policy changes. Is Australia being required to solve India's inability to employ all its people?

Prof. Sharma : I do not think it is. I do not think that is what is intended. I think it is more about managing perceptions. I do not think the Indian government will ever tell you that it agrees with the Indian media.

CHAIR: No, I was thinking more in terms that India generally would never be able to employ all of its people, so—quite legitimately—it looks for other sources of employment. Australia is one of them. I am interested in the suggestion about the jobs that could be filled by the thousands of students who are stuck in suspension. This is a community perception now. It is a legitimate sort of perception and it is something we are having a conversation about here. Were you are asked to respond to those sorts of issues?

Prof. Sharma : I do not think there is any requirement or any obligation on the part of Australia to employ those people.

CHAIR: No; to create policy parameters.

Prof. Sharma : I think it is set in the context that if we are going to have a serious growth in the workforce through migration, then here is a pool that already has adjusted to the Australian context, and we will be able to address that. We take away some headaches. At the end of the day, many of these people might figure out other ways of staying in Australia and some of them might get opportunities in India and go back. But we are trying to say that, if tens of thousands of people are in limbo, it always leads to an uncomfortable situation. It can always be exploited by different forces, for different purposes and reasons. That is the last thing we need when we are trying to promote the business links between Australia and India. That is the context in which we have placed this. There is absolutely no obligation on the part of Australia to solve India's employment problems now.

CHAIR: I was interested in your opening statements about the projected investment of Indian companies in Australia, in particular in regional Australia. You are quite right; if there is a huge influx in regional Australia there are issues with managing their absorption into the local community because they tend to be smaller and not as diverse as the main cities. You referred to the possibility that there will be tens of thousands of people required to fill those jobs. Can you just give me an idea of what sorts of jobs you are referring to and what sorts of skills? We always talk about skills, but in a very general way. What specifically would be required?

Prof. Sharma : If you take the example of a group like Adani, they are investing in a coal mine which will be, when ready, one of the largest single coal mines in the world. They are also investing and talking to other players about building a rail line. So, depending on the projections, when they are fully operational they could be employing from 5,000 to 7,000 people. They could be rail operators, they could be miners and they could be electricians. There will be a lot of vocationally trained staff. Of course, there will also be executives who come in, but they will also be recruiting executives locally from Australia. This investment is bringing in a lot of executive talent from India who, like executives anywhere, work with companies and then stay and find other jobs. Then other Australian companies pick them up and take them back to India and grow their investment there. All that flux will likely happen. A lot of the growth is going to be in the vocational sector and, in the mining area, in the plumbers, electricians and forklift operators who will be needed in the field. They are the kinds of workers that we will need.

Our advice to the companies in Queensland—I am from Queensland—is to go to areas where they are a bit stressed. Figure out how we can train people. Where do you take people from where there are high levels of unemployment? They are looking at it because they understand the corporate social responsibility. They have to make sure they source people locally. Only when you are not able to source people locally at some point is that influx likely to happen.

Again, this is in the context of the investment we are talking about. If you look at Gladstone, already the approved projects in LNG, according to some estimates, are around $60 billion. The Galilee Basin is another $10 to $20 billion, depending on how many coal mines get sold. Just the sheer scale of $80 billion to $100 billion of investment is going to lead to a lot of employment. I think it is that context. The challenge with these things is that everyone talks about employment. Currently we face pockets of unemployment in different depressed areas. I think the issue for all of us is to do it in a sensitive way that takes care of the needs of the community but makes the case that we have exhausted the local supply of talent and to make sure that we are able to take advantage of this investment and the economic competitiveness of Australia. We have to do that. We are very sensitive to that. Ultimately it is extremely important how we manage this.

CHAIR: You have made a good point, and you are absolutely right. Is there adequate understanding of the need to comprehensively ensure that all these investments that are coming into Australia try to pick up Australian labour, as opposed to creating the need to bring in overseas labour? Is that adequately managed, or are there problems, with local people missing out on opportunities to work in these new areas? There is a greater demand to bring people from overseas. You are right in identifying that—it is very important. How is that being managed and who should be responsible for overseeing that it is managed to the benefit of the local people and of those who may be required when they come in?

Prof. Sharma : Ultimately it is companies who are investing in Australia for the long term. It is in their best interest, because they are part of the community for a long period. So a company like Adani, if they are building a mine here—and I do advise them so I declare my personal contact with them.

CHAIR: Sure. Tell us about that company, because they are a practical example.

Prof. Sharma : Yes. But I have to declare a conflict of interest. I serve on one of the boards of the company.

CHAIR: Okay.

Prof. Sharma : They are here for the long term. They are building a long-term mine. Their idea is to be a responsible corporate citizen. They realise that eventually talent will be required. But being part of the community is extremely important. Another example is the Gujurat NRE in Wollongong. They have become part of the community. They support each and every community endeavour. They are a role model of how an Indian company should come in and become part of the community and take the community with it.

CHAIR: They are employing the local community?

Prof. Sharma : From what I understand they are employing local people.

CHAIR: Do you know what is the ratio of employment of local community as opposed to—

Mr Sharma : The ratio is about 20 to 80 per cent: 20 per cent are offshore people and 80 per cent are local.

CHAIR: Okay.

Prof. Sharma : I think the most sophisticated companies take this very seriously. That is what the Australia India Business Council is trying to promote.

CHAIR: Very good. I will leave some questions for later and go to other colleagues.

Ms GAMBARO: I know you are doing some work with Adani. GVK is coming into the Galilee Basin as well. One of the things that cause concerns out there is the 457 visas and making sure that those particular conditions are met. Sometimes that is done through labour agreements. Does the council advise companies about the 457 visa conditions and that they have to be strictly adhered to? I am probably putting you in a difficult position here. There are different practices, of course, when doing business in different countries. Do you speak to companies about their obligations to ensure that their workers coming from India are adequately compensated?

Prof. Sharma : We do not provide legal advice with respect to immigration because we are not qualified to do that. We provide advice to them that there is no substitute for following the rules and doing it exactly as the letter of the law says. Our advice to them is to always act with integrity, because that is the only thing in the long term that is going to help them. We tell them that they have to appear responsible to the community. Our advice to them is, 'You take the community with you—both sides of the political divide will be for you'. That is exactly the advice we are giving them.

Ms GAMBARO: Does the council get involved with local content and industry requirements or do you refer people to where they have to go?

Prof. Sharma : They have to get advice from professional providers who are qualified to give that advice. But, in a networking situation, when we hold their hands we emphasise the importance of integrity and ethical ways of doing things. At the end of the day they are ambassadors of India in this country, and it is important that that is the way they deal with it.

Ms GAMBARO: Thank you. I am sorry I have to leave.

Mr Sharma : As listed companies they must comply with the local requirements; they cannot do any hanky-panky.

Ms GAMBARO: What are you saying?

Mr Sharma : They are listed companies, and they have to comply with local requirements. There is no shortcut in that. So we do not advise them, but none of the companies we are aware of are doing such practices in the public domain.

Ms GAMBARO: It can be any companies coming to Australia. Thank you very much for that; I appreciate it.

Mr RAMSEY: Professor, you referred earlier—and it is in your submission too—to a large number of students who have completed studies and who are driving taxis. I have to say, when I hop in a taxi, I do not know how we would be getting around at the moment if it were not for Indian drivers. Putting that to one side, what kind of visa do they exist on in Australia once they have completed a study period?

Prof. Sharma : A large number of them are under bridging visas. Under the previous rules—I am being general here because I cannot comment on specific situations—they applied for migration, and so they are under bridging visas; they are basically in limbo. They have the right to work here legally until their case is decided. Until the case has been decided they are just in limbo. They are making a reasonable living by driving taxis, but some of them have qualifications. If there were a way for them to get some additional qualifications they could be more productive for the economy. I think that is the context of it.

Mr RAMSEY: How long, typically, do they have to wait for their visas to be processed?

Prof. Sharma : With some of them we do not know because there have been changes in the skilled work list. There is a need to address this issue.

CHAIR: Just to help, from memory—we might want to revisit some of the details of this—changes were made to the overseas students policy. Do you remember that?

Mr RAMSEY: Yes, I do.

CHAIR: That was as a result of the Baird report and others. I am struggling now to work out in my mind the details of what it has meant. The new rules were retrospectively applied, which meant that a lot would not be able then to make application for permanent residency. We might need to have a look at that to get an understanding of it. Many students are on bridging visas awaiting outcomes. The question is: how long are you going to be on a bridging visa and what is the outcome? The expectation was that many would not be able to make application to stay here—they would have to go back.

Mr RAMSEY: This is just anecdotal evidence, but when I talk to these people often they seem unsure on what basis they are here—like, 'We are working'. It can be a language difficulty too, where I am not fully understanding the situation.

Prof. Sharma : They are on bridging visas. By and large, from what I am aware of, they are legally working here. They are waiting for an outcome on their application. It is also a compassionate issue. They came under a system which, obviously, had a lot of failings. There were regulatory issues that we had on our part in terms of how some of those private providers—

CHAIR: There was a lot of abuse on both sides. It is really that group that have been caught up.

Prof. Sharma : Caught up, yes. Everyone has to take responsibility for their own actions. Our view is that there is going to be a serious influx of workers in the future, and here is a group that is already living in Australia. Some of them now speak with an Australian accent—they came as young kids from rural Punjab. That is our view. It will go a long way in helping many issues and situations. It is partly compassionate, partly strategic. Partly it helps make Australia a very multicultural and an exciting place.

Mrs MARKUS: Do you think there needs to be a specific, targeted program that links this group of students and potentially then looks at students that are coming beyond that group, for them to be linked to employment? Is there an expectation when they come here for them to be then employed or are some wanting to go back home?

Prof. Sharma : I think there are two different groups here. The students who are coming now are coming under a totally new set of rules and regulations and they know what their rights are after graduation. If they can find employment, if they fit in the category, they will stay here.

Mrs MARKUS: If they do not, they go back home.

Prof. Sharma : If not, they go.

Mrs MARKUS: That is clear?

Prof. Sharma : Yes, that is clear for the new group coming. We have set the rules of the game and they are the rules of the game. It is just that the group that is in limbo is the group who came under an expectation, when education was linked to migration in some ways. There were abuses on both sides.

Mrs MARKUS: Yes, absolutely.

Prof. Sharma : Now they have been here in the country for several years and they are in limbo. It is an issue. It is partly humanitarian, partly opportunistic, partly a strategic alignment with workforce needs. If we could have some targeted programs—they may not be for everyone—the ones that have the right sorts of skills could be trained, to link into an enterprise migration agreement. I have talked to the Queensland government and they have skills in Queensland. And I have talked to some of the companies. They are happy to trial something, but the federal government has to come to the party. Because they cannot—

CHAIR: Federal government policy allows them to stay here. It is almost effectively, I am sorry, a bit of a de facto amnesty. I notice—

Prof. Sharma : Or allowing them to be linked into an employed migration, yes.

CHAIR: For the purpose of permanent residency? Many want that.

Prof. Sharma : Or even getting enough real work experience that allows them to—

Mrs MARKUS: Do you think, professor, some of them may want to return home?

Prof. Sharma : Some of them may want to return home because—

Mrs MARKUS: If that is the best option for them.

CHAIR: Many could return home now if they wanted to. They are not going to.

Prof. Sharma : I think some have already gone home.

CHAIR: Many have. So if they wanted to go home, they would have gone by now. That is right.

Prof. Sharma : That is right. I do not want to over-emphasise this matter, but I think in the long term it is a problem.

CHAIR: It is a problem.

Prof. Sharma : We are just ignoring it. It might come back to bite us because everybody—

Mrs MARKUS: That is a group that if they are not employed now and if they have families, it is about them and their generations to come.

Prof. Sharma : They are missing out. If they are going to end up living in Australia, one way or the other, by marriage or this or that, we are not taking advantage of their full potential.

CHAIR: Do you have any questions?

Mr ZAPPIA: Thank you. I apologise for getting here late. I was caught up in another committee. Following on from that last issue, I assume that is the 80,000 Indian students that you refer to—

Prof. Sharma : Not the whole, but part of it.

Mr ZAPPIA: My question is: how many students would fit into that category? Do you have a rough figure?

Prof. Sharma : It is in the tens of thousands, but I cannot give you an exact figure.

Mr ZAPPIA: My question to you is this: in comparison to other countries, how does Australia rate in terms of the number of students who come here as opposed to those that go to other countries? In other words, are there countries where Indian students go to in greater numbers? My follow-up question to that would be: how do those countries rate in terms of what they are doing to accommodate their students as opposed to what we do here in Australia?

Prof. Sharma : The United States is one of the largest recipients of Indian students. The difference between the United States and Australia is that much of the growth in the United States is university and post-graduate. They are more suited to getting into the employment workforce in the US. Sometimes the US is less generous than we are. They can work for 20 hours a week as a student, but only on campus. They cannot work outside. We allow our students to work for 20 hours outside. We are, in some terms, more generous than the US. The influx of Indian students to the US is mostly university and post-graduate, whereas ours is largely vocational. I think that is the difference in the nature.

Mr ZAPPIA: You may or may not be able to provide an answer to this. Again, does the United States have a similar problem where there are students in limbo there? If so, to what magnitude?

Prof. Sharma : In the US, it is market driven. It has never been linked with migration. So if you get a job, you stay. The company will try to get you permanent residency. Otherwise you go and work somewhere else. Or you could work for a US multinational and they could send you to another country to work. The expectation was not there. A lot of the challenges we face are because, for a particular period of time in Australia, education and migration got linked. That is the challenge that we are facing.

Mr ZAPPIA: I have one last question. Why do the students who come here and go to a vocational education institution or university not undertake the same course in India? Is it because it is not available in India?

Prof. Sharma : Yes. India has a serious shortage of quality institutions because the participation rate in India is quite low and the scale of the university system is not keeping up with the demand. The vocational educational system is not well developed at all in India. It is a question of supply and demand.

Mr ZAPPIA: Thank you.

Senator GALLACHER: I have a question following on from that question. I met a GP recently who had a partner from Bangladesh. One of the challenges that were faced there was probably a more pressing need for his skills in Bangladesh than there was in rural South Australia. Is there any discussion about that—that we are allowing people to immigrate with specific skills, as you are saying, in engineering for these projects in Australia? Is that seen as a brain drain, if you like, on the Indian economy? Or are you producing enough for everybody, which is one side of the equation?

Prof. Sharma : There are several parts to this question. One is the inevitability of demographics. I will come to that. India is now becoming more mature in terms of thinking that it is not brain drain, it is brain circulation. So a lot of people in my generation went to the United States. Many of them now are coming back to India, because in certain areas the opportunities in India are excellent. People like me could make the same amount of money in India in the corporate sector, by driving it. So what they are seeing is that by sending their children overseas to understand a different way of doing business, they bring in new know-how and technology. Many of them come back and then they lead their companies. So they see it as brain circulation. These people do not necessarily totally migrate back to India. A number of my friends now maintain houses in San Francisco and in Bangalore. It is just increasing. They have businesses in San Francesco and in Bangalore. It is just an amazing thing that has happened.

Increasingly we are finding the same thing between Australia and India. Mr Mohit Sharma here has a business in Sydney but he also has people employed in India. More and more, you are seeing that.

India sees this as a net positive in the long term, but the inevitability of demographics is that the western world is ageing. China is ageing faster than the western world because of the one-child policy. So if you project 20 years from now, there is going to be a need for service professionals in almost every western country. If you look at the demographic pattern, India is one of the youngest countries on the planet. By some estimates, 50 per cent of its people are under 25. So for the next two or three decades India is going to have the surplus talent to address the shortage of professionals globally, especially in the western world. So is Middle East. So is Iran. Because of India's ability to work in a western system, we are going to see that more and more Indian professionals will be migrating to the west, just because the opportunities and demand will be there.

So the future of almost every western country is just a tiny bit more Indian because of the inevitability of demographics. That enriches each of these countries. It enriches India but it also will bring certain challenges. You have a very vocal media who think they have to protect the interests of Indians migrating. So if there is an attack on this or that, they make it into a big thing. It is just part and parcel of how a globalised world works. We have to understand it and be prepared for it.

Senator GALLACHER: Just on that point about the media, I have eaten in an Indian restaurant in Inverness and been served by an Indian with a Scottish accent. There is no problem for Indians assimilating in any country in any part of the world. Do you not think it is probably a little bit overblown, the whole thing?

Prof. Sharma : I was talking to the Indian high commissioner who used to be in Milan. All of the families who make parmesan cheese around Milan basically now are kids from rural Punjab. They are making parmesan cheese. If you look at how the patterns of migration are happening, I think media is looking for a story. Yes, it is overblown. I do not think it is by any means. The attack on Indian students was real. It was limited to certain areas of Melbourne and some parts of Sydney. My view to the Indian media, when I went to the Australian government, was that you are actually being irresponsible because you are trying to make it appear in India as if Brisbane is like Beirut when it is not the case. I am getting phone calls from parents concerned about their children. What we have to do is encourage the media to be objective. I think some of the issues were our own. We did not provide—

CHAIR: That would be a task near impossible for media outlets generally, not just the Indian media. Just on that, in recent times in Australia there have been announcements of banks bringing in a workforce, in this instance, from India and expecting local staff to train the workforce, which will then take the jobs back to India. You need to manage that, and you obviously have had situations like this that need to be managed. We talked about multiculturalism and the need for community building and so forth, but attitudes and these sorts of real life experiences are pivotal to the way people respond. I would like your thinking on some of that.

Prof. Sharma : Mr Sharma can talk about that.

CHAIR: Would you like to comment?

Mr Sharma : I am advising one of the banks on outsourcing.

CHAIR: Can you tell us a bit about that?

Mr Sharma : I cannot give the name of my client, but what was happening with the call centres was that it was immigrants in Australia who were getting jobs.

CHAIR: Who are?

Mr Sharma : It was immigrants in Australia who were mostly employed in the call centres. So, even if you call Melbourne, it is an Indian or a Pakistani answering your calls. So we are paying the high salary to the same immigrants who are here. So we were called to outsource those jobs back to the offshore destination so that we can pass off the benefit to the customers.

CHAIR: I have missed something. Can I take you through this? The people that were being employed by the call centres were immigrants living in Australia?

Mr Sharma : Yes.

CHAIR: So they would be Australian?

Mr Sharma : No. They are mostly from the subcontinent, from Asian countries, who are looking for jobs and could not find a job here.

CHAIR: But they are in Australia, are they not?

Mr Sharma : Yes.

CHAIR: But they were living here on a work visa, or were they permanent residents?

Mr Sharma : They were permanent residents.

CHAIR: So they were effectively living in Australia.

Mr Sharma : Yes.

CHAIR: We do not make distinctions in Australia. If you are living here, you are Australian. So, yes, they were Australian. They were people living in Australia, right?

Mr Sharma : Yes.

CHAIR: They were being paid too much.

Mr Sharma : Paid too much for same job, and the bank made a decision to upgrade or add more pay to those people who were here, to meet the job requirement because of the skills shortage in IT space. They were promoted and money was spent on training them to put them on other jobs in the bank itself. So we are moving up the value chain. So the GDP per person is more important than the cost. The two ways of looking at the thing are from a cost point of view or a GDP point of view. As we have skills shortages in the middle management, those people will move up the value chain by training—

CHAIR: So the people who were losing their jobs here effectively were not. They were being given higher jobs. Is that what you were saying?

Mr Sharma : Yes.

CHAIR: They did not seem to say that. They were not all new migrants. A lot of them were long-term Australian workers.

Mr Sharma : If you look at the data, and there has been a report by the parliament also, there has been more job generation by outsourcing than job loss. So there has been job generation. I have a copy of the study done by the parliament. I can send that to you, if you want.

CHAIR: Yes, I would like that. I am sure the job generation has been here in this country, not elsewhere.

Mr Sharma : No, here only. We are able to get more job generation by outsourcing and the report, which has been done, shows that the countries which have outsourced the jobs have gained more jobs at a higher level chain by outsourcing. The key here, the parameter, is GDP growth. By moving those people up the value chain, we can direct more revenue for the government and for the company, as such.

Prof. Sharma : I think it is a question that we have not done a good job of explaining what is happening. A lot of the problem is there. Again, the problem is that Indians cannot understand. If you look at $20 billion of two-way trade, $18 billion of the exports are from Australia to India, and $2 billion are from India to Australia. I do not think there is any other country where there is such an imbalance. Indians say: 'We accept that. This is the way it is going to be because we need the resources and Australia has the resources.' So in terms of Indian demand and Indian investment, it is creating far more jobs in Australia than Australia's investment that is going into India is creating. In the services sector, Australia has a trade surplus with India, and what we need to do is explain that to people. This was the conversation we had with Australia—India Council. We need to explain to people what is the Indian demand for Australian goods and services and the Indian investment coming in. What is it doing to the Australian economy? How many jobs is it creating, and what is going to India?

In a globalised world we all have our strengths and our weaknesses. Globalisation depends on that. We have some strengths and we have some weaknesses. India seems to have somewhat strength in IT areas. So what the Indians tell us is that we are importing in an order of magnitude more from Australia. Every time a software company gets a job, the media goes there. We tend to see from both sides. It is our failing that we have not done a good job of explaining to the people what the reality is. That is the context. It is more about re-education.

CHAIR: I think you are right.

Prof. Sharma : India is not an export-driven economy. India is a consumption-driven economy. Its net exports and imports are almost the same level. In a few areas like IT where it actually has a great surplus, it gets blown out of proportion. There are no more than two million Indians employed in the IT sector out of 1.2 billion. We have to put that in context. I think we make a caricature of the Indian economy by talking about the IT sector.

Senator SINGH: You say that India is not an export-driven economy, but one of your biggest exports is your students to this country.

Prof. Sharma : Yes.

Senator SINGH: India is the largest country—

CHAIR: India and China.

Senator SINGH: —for student export to Australia.

Prof. Sharma : But that actually becomes an export for Australia.

Senator SINGH: Absolutely, yes.

Prof. Sharma : For India, it is not an export.

Senator SINGH: Can I ask you: since the unease that happened with Indian students, I understand that that export, or whatever we call it, dropped off considerably and the number of Indian students coming to Australia started to go into decline.

Prof. Sharma : Yes.

Senator SINGH: Hence our government is trying to support Indians feeling safe and wanting to come back here. I know that had a detrimental effect for a number of universities who rely very much on the income generated by international students, Indian students included. Where is that now, now that some time has passed? Is that bell curve starting to go back up again?

Prof. Sharma : For the university sector, the future looks reasonably good, because the recommendations in the Knight review are going to make it a bit more predictable, and I think we feel that that the university sector will recover. For the vocational sector, it will require a different business model. I think the university sector in the next two years will recover.

Senator SINGH: Can you give an example of some of the industries that have benefited from the Indian Diaspora into Australia?

Prof. Sharma : It depends. Initially India was a good supplier of doctors, for example, then the information technology industry. Telecom has already benefited. We are, of course, seeing academia always having a sensible number of Indians coming in. What is happening is that more and more resource companies are coming in and they are bringing in Indian executives. We are likely to see more and more of those executives jumping ship, joining Australian companies, helping them expand back into India. That is the best thing that will happen because of this investment.

CHAIR: Would you like to add something?

Mr Sharma : CAs were not recognised here earlier. Australia now recognises Indian CAs and economic accountants also. So it was accommodation, doctors, IT, now accountants and then forward going it will include miners.

Prof. Sharma : Professional services are now picking up.

Mr Sharma : The legal profession is recognised as an issue.

Prof. Sharma : It is a problem in India because the Indian bar council does not recognise foreign lawyers. They can do backroom work there. We are pushing that. So we are not just for Indian companies here. We are pushing with the bar council of India. We have five Australian universities where law degrees are recognised by the bar council. So if an Indian studies law here, he can practise with this degree in India. But still we have not got an Australian or an American or a British lawyer who studies outside to be able to go and practise law in India. I think the legal profession in India is our challenge.

CHAIR: Are there any other questions?

Mr ZAPPIA: Madam Chair, I have one question. Again, if you can answer it, I would appreciate it. If you cannot, I can understand. What percentage off the students who come here would complete the degree which they committed to when they came?

Prof. Sharma : I think the university sector is a very hard life. I think there are some challenges in the vocational sector. I would not be able to give you an exact figure, but our thinking is that the attrition rates for international students are no different, in fact less than for domestic students.

CHAIR: They are fee-paying students.

Prof. Sharma : They are fee-paying students. They have an investment.

Mr ZAPPIA: There is a purpose for asking the question.

CHAIR: Do you want to tell us what the purpose is?

Mr ZAPPIA: No, I do not. I was curious about the figures. You believe that for university sector it is very high; for the vocational sector it might be lower.

Prof. Sharma : I would not be able to comment on that, but I have heard anecdotal evidence that it may be lower. I would not be able to comment on that.

Mr ZAPPIA: Thank you.

Prof. Sharma : If I can just—

CHAIR: We might get some information on that. There was only one other thing that buzzes around in my head. In this submission you have drawn attention to the need to enhance the English language skills of the many Indian students that are here. I know many of them have come here for the purpose of learning the English language. It struck me that India is very much an English-speaking country. I am just wondering what the level of English taught there is. Certainly most of the Indians I have met speak English.

Prof. Sharma : Because you have met mostly Indians from metropolitan areas. One of the challenges as part of the vocational skills migration is for the first time we saw the education sector attracting students from rural India and the divide between rural India—

CHAIR: The English language skills are not—

Prof. Sharma : Are not the same.

CHAIR: Thank you for clarifying that.

Prof. Sharma : I must confess I have a 12.30 flight, and I have promised my daughter I will be back. It is her birthday and I promised my daughter I am going to pick her up from school. I have to go home.

CHAIR: I understand that. Thank you very much. Thank you for attending.

Prof. Sharma : I do apologise. I know the importance of the parliament, but my seven year old daughter on her birthday gets precedence.

CHAIR: It is very important. We understand. I can relate to that. We get that because we have similar challenges. Thank you very much. We will come back to you, if you like. I am sure there will be some things we wish to come back to.

Resolved (on motion by Mr Zappia):

That the committee authorise the publication of the evidence given before it at the public hearing today, including publication on the parliamentary electronic database of the proof of transcript.

CHAIR: I now declare this meeting closed. Thank you for attending this day.

Committee adjourned at 11:55